Credit card companies are looking at the probable scenario of a 20% default rate so they are screwing everybody as much as they can before they default... one day late on a $10,000 balance and you get nicked for $300. I came to feel a few years back that the Credit thingy is little more than extortion. http://www.nytimes.com/2009/05/10/opinion/10sun2.html?ref=opinion EDITORIAL The Credit Card Squeeze SIGN IN TO E-MAIL PRINT SHARE Published: May 9, 2009 At a time when everyone is talking about troubled banks, Congress can provide relief to millions of their increasingly alarmed customers. Many credit card holders are complaining about unexpected increases in fees or interest rates that double or triple for no reason. Related Times Topics: Credit Crisis â The Essentials | Federal Reserve System The Center for Responsible Lending estimates that at least 10 million cardholders have seen their interest rates skyrocket in the last six months through no fault of their own. The center has also found that instead of changing their behavior in anticipation of tough new Federal Reserve rules that will take effect in July of next year, most big banks continue to engage in practices that provoked the public outcry and the Fedâs response in the first place. Five of eight top credit card issuers in the country have added new fees on transactions like cash advances or for monthly maintenance. One major card company began charging a late fee of 3 percent on unpaid balances, which means that on a $5,000 balance, the cost of being just a day or so late jumped from $39 to $150. Fortunately, however, Congress is moving to turn much of the Fedâs reform package into law. The House has already passed its version by a wide margin, giving Carolyn Maloney, a New York Democrat, the support she has been seeking for years for the Credit Cardholdersâ Bill of Rights. Christopher Dodd, a Democrat now facing a tough re-election fight in Connecticut, is trying to steer a somewhat tougher version of Ms. Maloneyâs bill through the Senate. Both bills require adequate advance notice of rate increases or changes in terms. Both make it far harder for students to get credit cards and for banks to increase rates on existing balances. Both end the practice of charging interest on balances already paid. The House bill would give banks a year to deal with these new rules; the Senate would give them nine months. That is already too long for many customers. Fed Chairman Ben Bernanke argues that banks need the extra year to adjust. Senator Charles Schumer, a Democrat from New York, says the Fedâs leisurely timetable is âunconscionable.â He should make this same point with his Senate colleagues in order to make the new law go into effect much sooner. From the looks of it, the banks are ratcheting up fees and interest before the Fedâs rules kick in and it is too late. This makes an earlier deadline imperative.